Ah Meng had 14 meals on Monday, 0 for the rest of the week. Therefore, he had an average of 2 meals a day.

shocked-monkey

The statement above shows how statistics can often be misused and misperceived. Statistics can be deceptively convincing. Consider the following extract from Asiaone.com: “1 in 3 Singaporeans dies of cancer”. It is convenient to assume that by just being a Singaporean, you have a 33% chance to die from cancer.

Such an innocent looking statement can easily rob you of the responsibility to take care of your own health. Because the truth is that, the chance of developing cancer depends on influencing factors such as diet, exercise or mental well-being which may be within one’s control. One does not develop cancer due to a statistical result.

Looking beyond the surface of the statistical data, it would be more appropriate to say that, approximately 33% of Singaporeans are likely to die from cancer due to failure in taking good care of their health, or genetic/environmental factors. This empowers one with the responsibility to take control of their health.

As per Mark Twain’s quote “Be careful about reading health books. You may die of a misprint.” Do keep in mind that, a misperception can be deadly too. This is why it is always important to talk to your financial advisor about your financial concerns. Sometimes, all it takes is a minor change in perception that can lead to a major positive change.

How a shift in perception can save YOU more money

The next time you are struggling on whether to buy something or not, ask yourself: “Is this a good to have or a necessity?” If it is a good to have, what can i do with the extra money if i do not buy it? Once we are able to recognise our priorities properly, it would be easier to convince ourselves to look past the “good to haves” for a more fulfilling purpose.

A client I was working with (let’s call her Amy), was complaining that it is impossible for her to save more money monthly. We studied her spending habits together, separating the needs and the good to haves.

It was found that Amy has the habit of waking up late and taking a taxi to her company as a result. This habit cost her about $150 a month or $1800 yearly. We identified the act of taking a taxi to work as a good to have, because Amy has a choice to sleep earlier and wake up on time.

Next, she created a compelling reason for her to stop the unnecessary spending by thinking about what she can do with the extra money if she starts waking up on time. She figured out (with my help of course) that by saving the $1,800 a year over the next 20 years, it will equate to being able to retire 3 years earlier than the intended retirement age.

Fortunately in this case, Amy didn’t need much persuading and has already changed her habits is already saving the money to buy herself a well-deserved and planned earlier retirement.

GEN Planner’s Thoughts:

 In my opinion, there are 3 reasons why people fail in financial planning:

1. No Goals

2. No Plans

3. Cannot Save

I believe the real show stopper is the inability to save. From my experience, it is really an emotional issue more than a math problem. Having someone you trust to advice and help you get started is the key.

Story by Debra Shea

Email: debra.shea@proinvest.com.sg

 

(NOTE: Get our Financial Planning Philosophy (Building Transferable Wealth Guide) as a guide to help you plan your life finances. Get your FREE hard copy delivered to your home here)

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